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10/09/2005

Comment on Federalism, Economics, and Katrina-BECKER

Posner gives good arguments why the federal government has important advantages in fighting emergencies, like the recent devastating hurricanes, that wreak havoc over a broad area that involves several cities and states. But bigger and centralized governments are also more bureaucratic, and respond slowly and erratically. Surely, the local government of New York City responded faster to the 9/11 terrorist attack than did the Federal government, even though New York‚Äôs response could also be criticized.
None of the governments responded quickly or effectively during the Katrina emergency, even ignoring the lack of preparation for the overwhelming of the New Orleans levee system by a powerful hurricane. Fortunately, since there was advance notice of Katrina‚Äôs destructive path, most of the vulnerable population evacuated their homes and businesses, and took other protective measures.
While I agree with Posner's general discussion of the different advantages and disadvantages of local and centralized authority, I still have a strong preference toward decentralized authority whenever that is possible. One reason is that local governments have a better feel for the special needs of its own population than a distant central authority can ever have.
A second important consideration is that individuals can move from one locality or state to another in search of better schools and other public services. This is an enormous advantage that can never be duplicated when power and decision-making are centralized. Competition among states and cities within a country puts considerable pressure on lagging state and local governments because people vote with their feet. They move where there are education and other services that better meet their needs.
Unfortunately, this type of competition works well only for individuals and families that are reasonably well informed about alternatives elsewhere, and who have the resources and inner energy to take the large and risky step of moving to a possibly better and often distant location. Most richer and better-educated persons can do this, but many studies demonstrate that poorly educated persons are far less likely to move across cities and states than are the more highly educated.
The population that remained in New Orleans during Katrina and who suffered the most had low incomes and education. This is not surprising since the low educated, as I just indicated, are usually less likely to move to take advantage of better opportunities elsewhere. Many do not own cars, and have to take public transportation, and they must find places to go. But without minimizing the importance of these considerations I want to emphasize another factor at work in the Katrina episode that contributed to the particularly heavy suffering of persons at the bottom end of the income and education distribution.
Governments at all levels-federal, state, and local-simply failed to take decisive and appropriate actions to meet the emergency brought on by Katrina. So families were mainly left to their own devices, and most of them had enough initiative to take as effective action as was possible. Of course, they could not do everything since their homes and shops were in place and often had to be abandoned.
The poor were hurt most by the government's failure partly for the reasons just indicated, and partly because they have become heavily dependent on governments to take care of them. This "dependency culture" created and nurtured perhaps unintentionally by welfare, Medicaid, and other government programs saps initiative and energy, and greatly weakens the habit of making one's own decisions. Dependency on government is especially devastating in serious emergencies, such as that caused by Katrina, when governments fail to take quick and appropriate actions.
It may be best to give the Federal government responsibility for meeting emergencies that cast a wide net over a large area encompassing many localities and states. But each emergency is somewhat different, and it is hard to believe that even after large and numerous investigations of each failure, a large bureaucracy like the Federal government is likely to take fast, effective, and decisive actions.
This is one important and usually overlooked reason to reform transfer programs and legislation to help the poor so that they have much greater responsibility in organizing and managing their lives. They need to be induced to look for private housing as well as jobs, and to be held responsible for bad decisions rather than being excused because they are "victims". Such changes in these programs for the poor will probably not make governmental responses to emergencies any better. Yet they could significantly reduce the enormous damage done from catastrophic events to families who can least afford further losses. These families will respond quicker and more successfully to catastrophes if they are more accustomed to taking care of themselves.

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Dr. Becker's comments seem to be based on the media reporting and possibly on projecting stereotypes onto the New Orleas situation. As time goes back, we are learning the limitations of the media and the ways in which the area is unique.

Gallup reported yesterday on CNN that, of those who stayed in New Orleans, 45 percent though they could ride out the storm and only 25 percent lacked transportation/money to leave. Individuals made choices based on available information. Don't recall that Gallup asked whether people stayed because they thought the government would evacuate them before the flood.

I picked up the factoid that in the Lower Ninth Ward although a third are below the poverty level, 60 percent own their own homes. That ownership figure is well above the national average for blacks. That seems to be a function of the social stability of the area; people just don't leave the Big Easy. (True of both white and black--see the Michael Lewis piece in the NYTimes Mag last Sunday.)

There's also some evidence that New Orleans should have been safer than it was--that problems in the soils the flood walls were built on caused their failure, not water overlapping the top.